Microsoft is pinning its hopes on European researchers to help it shake up the search and advertising marketplace. It plans to open a search technology center somewhere in Europe by the middle of next year.

The company is looking for new ways to disrupt Google's dominance of the search and online advertising markets and hopes European researchers can come up with ideas to rival its Live Search cashback feature, which offers online buyers rebates on products bought as a result of using Microsoft's search engine.

The cashback idea did not originate with Microsoft researchers, though, but with Jellyfish.com, a Wisconsin company that Microsoft acquired for an undisclosed sum last October.

It was also through acquisition that Microsoft moved into the enterprise search market, paying US$1.2 billion for Norwegian company Fast Search and Transfer in January.

Success in Europe is paramount to Microsoft's search strategy, it said Tuesday.

One way it hopes to achieve that is by adapting search tools to local markets, as users have different expectations according to where they live.

Microsoft opened its first research center dedicated to search in 2005, in Beijing. The company is not saying yet where it will locate its European center, hinting only that some engineers could be based in satellite offices in the U.K., France or Germany.

France and Germany already have their own government-funded search research programs. France's Quaero project is focusing on tools to simplify searching for audio and video, while Germany's Theseus program is investigating semantic search, or ways to search by meaning.